Enterprise Inns halts lessee’s assignment ‘because of MRO’
Rachel Burke has run the Cross Keys in Knutsford, Cheshire, for 20 years, and was in the final stages of renewing her lease and completing the assignment of her pub when she was told by her BDM Colin Broadhurst that it would now not proceed because of the soon-to-be-introduced option for pub tenants to choose a ‘market rent only’ option.
She said that she had paid all the requisite legal fees to Enterprise and was due to exchange contracts on Monday (8 December) and receive a premium on the lease assignment.
“But Colin said: ‘Nothing’s happening – there’s a hold on all lease renewals and assignments.’
“They’ve pulled the rug from under us to protect their business interests. But where the hell does that leave us?
“The government made this change to ensure that publicans are better off, but it’s happened at the worst possible time for us, and is preventing us from getting a return.”
Simon Townsend, CEO of Enterprise Inns, told the Publican's Morning Advertiser: “The changing legislative environment that’s emerged over the past couple of weeks has created a lot of uncertainty, and has affected discussions that were underway with a small number of our publicans.
“Sadly this is one of the unfortunate unintended consequences.”
He said: “It’s not right to say that we have made any blanket rules, or put a freeze on all rent renewals and assignments. But we will be looking at each case on its merits, in light of the new legislation.
“We’re fully engaged with affected publicans, and would suggest the best thing for them to do is to engage with us to resolve these individual situations.”
Townsend added: “Another area that will be affected is investment. We were planning to invest £70m in our pubs over the next year, and now we’re having to look again at those plans against a background of uncertainty, given that where we make an investment, someone could now do something that risks our returns. Would we want to add to our normal level of investment risk?
“This period of uncertainty is really unhelpful, at a time when the pub trade had real forward momentum. And it’s affecting all parties.”
